AAVE jumps 11% fueled by heightened whale activity

AAVE, the native token of decentralized lending platform Aave, has recently attracted the attention of whales after its price surged by over 11 percent on September 5.

At press time, Aave (AAVE) has become the 42nd largest cryptocurrency, up from the 47th spot on August 20. The token’s market cap has surpassed $1.98 billion, marking an increase of more than 4% in the past 24 hours.

According to price data from Crypto.news, AAVE was trading at $132.95, rising from a weekly low of $116.13 reached a day earlier. The token has seen a significant 60% increase in the last 30 days. Despite this recent surge, AAVE remains 80% below its all-time high of $661.69 reached in May 2021.

The recent surge in AAVE was largely due to a major jump in whale activity. On September 5, Lookonchain reported that two whales acquired approximately $2.2 million worth of AAVE in less than three hours.

Additionally, the previous day, another whale purchased a significant amount of 50,604 AAVE tokens worth approximately $6.78 million at an average price of $134.60 per token. This brings their total holdings to 125,605 AAVE tokens worth approximately $16.9 million at current prices.

AAVE has seen increasing interest among whales in August, likely due to its solid fundamentals. Data from DeFiLlama shows that Aave has more than $11 billion in assets and has generated more than $281.39 million in fees this year.

Additionally, data from IntoTheBlock reveals that whales who controlled more than 1% of Aave’s circulating supply now hold 59.17% of the total supply. The high concentration of large holders suggests that AAVE’s price is affected by whale activity.

AAVE concentration graph | Source: IntoTheBlock

Additionally, there has been a sharp increase in both inflows and outflows of AAVE among large holders, with inflows up 326% and outflows up 353% in the past week. However, net inflows of AAVE among large holders have increased 61% over the same period, suggesting strong buying interest that is helping to drive the upward momentum in AAVE’s price.

The recent price surge in AAVE comes after Donald Trump announced his DeFi startup World Liberty Financial, which plans to develop a decentralized financial system using Aave’s non-custodial lending platform and Ethereum’s infrastructure.

The startup’s legal counsel, Gabriel Shapiro, explained that this would act as a “lightweight, non-custodial feeder” to Aave, allowing users to deposit funds without the need to create a fork. The startup’s goal is to introduce Trump supporters to DeFi, which would then encourage speculative purchases by increasing confidence in Aave’s potential for mainstream adoption.

Major liquidation levels

According to on-chain analytics firm Coinglass, key liquidation levels are currently around $130.2 on the low end and $139.8 on the high end, with day traders heavily leveraged at these points.

Source: CoinGlass

If market sentiment changes and the price of AAVE drops to $130, approximately $1.78 million of long positions could be liquidated. On the other hand, if sentiment improves and the price climbs to $139.8, approximately $5.04 million of short positions could be liquidated.

At press time, data showed bears taking control and the potential for long positions to be liquidated at lower levels.